Friday, January 28, 2005

More on Overcharging

Leon Hisle – colleague from Kentucky days and friend, now retired – sends along the following report of his experience at the University of Kentucky Hospital, of which I was Administrator when it opened in 1962.

Your article on overcharging reminded me of an experience I had in July in your former hospital, the University of Kentucky Medical Center.

In July I went into fibrillation and went to the UK Medical Center at about 9AM. The family care physician ordered me admitted. I was taken to the ER because there was no bed available. I sat in a wheelchair and then lay on a stretcher for the next four hours. No service except I was hooked up to a monitor which, I assume, was being watched somewhere. A bed became available about two o'clock. I stayed there until eight that night, during which time my heart went back in rhythm. A cardiologist came by and told me I could go home.

The entire time I received no service except the monitoring, didn't get a food tray or a bed pan!

The hospital billed Medicare and AARP $5,100.

Tuesday, January 25, 2005

Childish Behavior in Health Care

This morning’s Boston Globe had a front-page article by health reporter Scott Allen about how Eliot Hospital in Manchester, N.H. had improved its obstetrical services by applying something called Flow Management.

As I understand it, Flow Management is what the parking garage near the Huntington Theater in Boston does when it asks me to pay when I park so as to avoid the long line at the cashier’s window when the play is over.

It doesn’t sound very complicated but seems to be the latest rage in health care. The heads of no less than Harvard Pilgrim Health Care, the Institute for Healthcare Improvement and the Cambridge Health Alliance were quoted commenting on its marvels.

According to the report, what Eliot Hospital did was to divide its obstetrical beds into two groups, reserving one for scheduled induced deliveries and the other for normal deliveries. Nothing very striking about that. But the article went on to point out that previously, most of the obstetricians scheduled their induced delivery patients for 7:00 a.m., thus simplifying their own schedules for the rest of the day. Then whenever there was a surge of normal deliveries, inductions had to be cancelled, causing confusion and unhappiness all around. Limiting the number of beds available for inductions forced obstetricians to schedule their inductions at various times throughout the day, thereby evening out the “flow” of patients.

Why, one might ask, had not someone thought of that long ago? If a parking garage could figure it out, why couldn’t hospitals? Eugene Litvak, Flow Management guru on the Boston University faculty, suggested an answer. “….for clinicians, particularly physicians” he said “there is an element of disrespect toward managers.” As a result they “view aggressive managers as a threat to their traditional autonomy.”

After reading the article, wife Marilyn said she didn’t know whether to laugh or cry – to be happy because service was improved or disgusted because grown-ups engaged in the important business of caring for patients could behave so childishly.

Sunday, January 23, 2005

Senator Frist’s Plan

Ed Parkhurst – colleague during my employed days, head of the hospital consulting firm Prism, and friend – sends along the health care plan of Senator Bill Frist, M.D., Republican majority leader in the United States Senate. The quotation is taken from the January 20, 2005 issue of the New England Journal of Medicine. Ed got it from what seems to be an e-mail circular called Quote of the Day, which adds its own comments at the end.

Consumer-Driven Health Care

The new system also must be responsive primarily to individual consumers, rather than to third-party payers. Most health care today is paid for and controlled by third parties, such as the government, insurers, and employers. A consumer-driven system will empower all people - if they so choose - to make decisions that will directly affect the most fundamental and intimate aspect of their life - their own health. This empowerment gives people a greater stake in, and more responsibility for, their own health care. Health care will not improve in a sustained and substantial way until consumers drive it.

Affordable Health Coverage for All Americans

Tax-free health savings accounts (HSAs), adopted in 2003 as part of the Medicare Modernization Act (Public Law 108-173), will help speed the movement to a more consumer-driven health care market. It is estimated that half of all employers will offer HSAs to their employees within the next two to five years. HSAs, coupled with affordable high-deductible insurance policies, give individual consumers more control over their health care choices and hard-earned dollars. HSAs give people a greater stake in their own health care.


American health care is at a crossroads. Rapidly advancing forms of technology are dramatically improving lives. Simultaneously, U.S. citizens face enormous inefficiencies, escalating costs, uneven quality, disparities in health care, and rising numbers of uninsured people. For decades, policymakers have debated and rejected a variety of solutions. What we have never done in the health care economy, however, is foster the kind of competition that has made other industries the most successful, prosperous, and advanced in the world.


Comment: Sen. Frist uses rhetoric that makes every free market enthusiast's heart pound with sheer joy. But those who understand the current policies that have resulted in our extravagantly expensive but perilously underperforming health care system, also understand the policies behind Sen. Frist's rhetoric. Not only is he implicitly supporting financial hardship and personal bankruptcy, but, worse, he is supporting policies that can only increase suffering and death.

Tragically, Dr. Frist is allowing political ideology to trump beneficial health policy. It is difficult to reconcile this with his role as a colleague in the healing arts.

Thursday, January 20, 2005

A Step in the Right Direction

Regular readers (if there are such) will know of my ongoing search of the media for evidence of interest in prevention as an approach to the malpractice problem.

Well, I just found some.

The lead editorial in the January 9, 2005 issue of the Sunday New York Times was titled Malpractice Mythology and dealt with the Bush administration’s efforts at “tort reform.”

As might be expected, the editorial was critical of the Bush approach. It set out a number of objections but then closed with the following statement:

“Although the administration has been sponsoring some projects to reduce medical errors or speed the resolution of claims, these have faded behind the full-court political press to impose ‘tort reform.’ Instead of fixating on an idea that would do little to solve anything but the health care industry’s desire for fewer big court awards, Congress should push for a wide range of demonstration projects aimed at solving the malpractice problem by actually cutting down on malpractice.”

A two-sentence paragraph at the end of an editorial does not make a social movement, even if it appears in the Sunday New York Times.

But it’s a step in the right direction.

Monday, January 17, 2005

Believing the Untrue

In connection with the ongoing discussion of hospital mergers and economies of scale, John Russell, long-time executive head of what is now the Hospital and Healthsystem Association of Pennsylvania, has provided me with excerpts from an article that Steve Shortell published back in 1993. Steve is a well-known academic guru in the field of health care and is currently Professor of Health Policy and Management at the University of California in Berkeley.

Shortell identifies eight major barriers to creating successful mergers.

In headline form, they are

Failure to Understand the New Core Business
Inability to Overcome the Hospital Paradigm
Inability to convince the “Cash Cow” to Accept System Strategy
Inability of Board to Understand New Health Care Environment
Ambiguous Roles and Responsibilities
Inability to “Manage” Managed Care
Inability to Execute the Strategy
Lack of Strategic Alignment.

Each of these has several subheadings which can be seen by looking up the original publication, which is in The Journal of the Foundation of the American College of Healthcare Executives, Volume 38, Number 4/Winter 1993.

I would have added another, which would be Discrepancy between the Actual and Stated Reasons for the Merger.

As I observed mergers happening during the 80’s and 90’s, it seemed to me that most of them were motivated either by the empire building instinct of an ambitious CEO or by a desire to achieve a stronger bargaining position in the managed care market. (The managed care company would offer a small hospital a low rate of payment and the hospital could take it or leave it. The bigger the hospital was, the harder it was for the managed care company to do that). Probably in most cases there was some of both.

Of course, neither of these motivations could be voiced publicly so the stated reasons included things like economy of scale, consolidation of services, elimination of duplication, integration of care, and so on.

The prudent course following most mergers would probably have been to leave existing operations pretty much untouched at first, and then implement carefully planned consolidations of demonstrable benefit as opportunities arose. But, there was great pressure to deliver on the publicly made promises and to do so quickly. It was probably also the case that some CEO’s came to believe their own rhetoric. The sad consequences are now history.

A lot of things in this world would go better if people were less willing to believe things that are untrue.

Saturday, January 15, 2005

A Limit to Tolerance?

Don Shropshire, friend, colleague, and retired CEO of Tucson Medical Center sends along the below paragraph from the January 3, 2005 issue of AzHHA Health-E-News, the daily news service of the Arizona Hospital and Healthcare Association.

Don’s finding it of interest must mean that the tolerance of even a battered old hospital administrator has its limits.

“[Arizona] Republic columnist Laurie Roberts writes a sequel to an earlier piece that criticized lack of sufficient scrutiny of hospital bills to insurance companies. An example was given of two “torso socks” (aka T-shirts) that cost $278 apiece, billed to a patient by Phoenix Children’s Hospital. Blue Cross did not dispute the bill. Examples at other hospitals include: a $28 toothbrush; a $61 IV needle; a $19.95 raised toilet seat billed at $96 to Medicare; a $57 paper hospital gown and a $265 gelatin sponge. When John Warnick’s son John broke his leg, the ambulance ride cost him $1,000, even though he simply rode in the ambulance in a seatbelt, with no medical care provided. A $40 sports physical mysteriously became $248 when a clinic discovered Paul Berardi’s son had insurance coverage. Berardi filed a complaint with the Arizona Medical Board, which called it “a miscommunication.” “When you look at it, inflation is less than 3 percent. Why are medical cosdts going up 15 to 18 percent?” Berardi asked. Officials say the cost of technology, lawsuits, uninsured patients and staffing a hospital around the clock lead to these huge markups. Despite that, hospitals around the state are adding beds and more staff. Alan Blumenreich, the father billed for the T-shirts, will pay his bill, but also says he will file a complaint with the Attorney General’s Office.”

Anyone wishing to read the entire article will find it at http://www.azcentral.com/arizonarepublic/local/articles/0101roberts01.html

I looked it up. Roberts concluded her article by saying “Something's fractured all right, and it's far worse than anything Matt Blumenreich did to his back.”

Friday, January 14, 2005

The Ulysses Syndrome

Long-time friend Claus Curdt-Christiansen is Chief Medical Officer of the International Civil Aviation Authority, a U.N. agency located in Montreal. Claus passed along the following without identifying the author, leading me to suspect that he might have written it himself.

Much has been written about the incompetence of modern day doctors, the swelling costs of medical care, malpractice, and the need of patients to be in charge of or at least contribute to the medical decision-making process.

In this context, I wold like to tell you a story which I have called

The Ulysses Syndrome

Ulysses was, as I am sure you know, a hero who left his home, roamed the world of antiquity for twenty years, experiencing much excitement and many adventures, and then returned to his home to find that, in the meantime, he had lost his wife, his house and everything else too.

Now there was a time (in my childhood, I think) when a patient with a sore throat and coughing would go to his family doctor or even have the doctor visit him in his home. The doctor would look at his throat, listen to his lungs, diagnose a viral infection, pat the patient’s shoulder, prescribe hot milk with honey and a scarf, and promise him that he would be all right in few days time and ready to go back to work. And quite right, the patient having full confidence in his doctor, got better and resumed his work next week. All were happy. That was then.

Not so today. The patient may visit the doctor but he knows that there are limits to what the doctor knows and what a clinical examination can reveal. The doctors knows that too and doesn’t want to be sued for malpractice, so after the examination with, or more likely without, patting the patient’s shoulder, he refers the patient to X-ray of the lungs, just to be on the safe side, and because the patient wants it, of course. He also takes blood. After all, medicine is a science and a diagnosis must be based on scientific evidence. Both procedures entail some waiting time and delays before the results are ready. Treatment cannot be delayed, so the doctor prescribes an antibiotic (completely useless and possibly harmful) but necessary to be on the safe side and the patient, of course, wants it. He also wants and gets sick leave until the matter is resolved. Although the lungs are fine, the radiologist will in some 5% of cases find a suspicious looking area that calls for further examinations, and modern laboratory procedures do not allow single tests to be carried out but, in the name of efficiency, examine the blood for some 20 different qualities, including those in which the doctor is interested but many more which in the context are of little or no interest. The so-called ‘normal range’ is usually defined as the results obtained when analyzing the blood of a high number of healthy young medical and nursing students at a major teaching hospital. The top and bottom 2.5% of results are taken away, the remaining 95% of results form the basis for what is considered ‘within normal limits’ in that region of the country. Of course, the last 5% were also taken from healthy young students, at least so they believe themselves, just a little extreme. To be on the safe side we disregard the extremes. This means that out of twenty blood analyses, 5% or one will be outside the ‘normal’ range. So when the results come back, the doctor will be obliged to consider this abnormal finding – and to do something about it. The same goes for the suspicious chest X-ray. So the patient is referred for a tomography of the lungs, which unfortunately doesn’t exclude a possible pathology. So the next step is a CAT-scan, later to be followed by an MRI. The waiting lists for these advanced high-technological examinations can be many months, so the sick leave is continued. Also the blood must be considered, so more blood-letting ensues and more ‘abnormal’ results arrive. The picture is unclear, so the patient, who had little confidence in his family doctor in the first place, insists on a referral to a specialist. The specialist has a long waiting list, so the sick leave is continued. There are, however, limits to what even a high-powered specialist can find out in his down-town clinic, so he suggests in order to crack this difficult case that the patient be admitted to a hospital for further in-depth investigations. This is no emergency, so there is a waiting list. The sick leave is continued. But finally the patient is admitted, fully investigated in accordance with best medical practice, and found to be normal. He now leaves the hospital – as healthy as can be – to find that after this period of extended sick leave, he has lost his job, gotten behind with the mortgage on the house so that it now has to be sold, and the wife, being unable to put up with 24/7 care of a sick spouse, has left him. Returning to a normal healthy productive life after a prolonged period of absence is not easy, so in many cases the patient will need professional help from a psychologist or a psychiatrist to cope with being normal.

Okay, this is just a story. But I think it provides some of the explanation why health costs have been rising in recent years.

Thursday, January 13, 2005

A Unique Insight on Malpractice

The below comes in from Peter Geilich, friend and colleague from Saudi Arabia days. As a sideline to his career in hospital administration, Peter has served as expert witness in malpractice cases involving hospitals. He reports that prior to 2000, his cases were about 70% defense and 30% plaintiff. Since St Paul left the field along with Med Mutual of NC it has been 100% plaintiff.

Re malpractice involving hospitals, I handle about 6-7 cases a year and have done so for about 20 years now. So that is about 100-120 cases. What is surprising (or maybe not) is that about 40-50% of those cases have involved for-profit hospitals (HCA, Tenet etc). Usually the MD in question is either borderline incompetent or disruptive. Management knows all this but does little or nothing about it. Why? because the MD is often a big admitter.

I have found that some of what a hospital publishes about it's capabilities is over-stated (i.e.; 'up-to-date equipment' when it is not, 'state-of-the-art' when it is not, 'one of the nation's finest medical center's' (aimed at Latin Americans) when it is a 200 bed facility in a mid-sized city with another hospital about 300 beds.

Another issue that has happened more than 3-4 times in my experience is small print on ER records that says - your X-rays will be read by a radiologist and if there is a change in diagnosis from what the ER doctor told you - you will be notified..... only no notification is made.

Wednesday, January 12, 2005

What Does a not-for-Profit Hospital Owe its Community?

Tom Cragg, friend, erstwhile fellow parishioner of Christ Church Detroit, and staffer in the health benefits section of General Motors, was thoughtful enough to send me a copy of an ad recently run in the Dayton, Ohio newspapers and sponsored by DELPHI, the IUE-CWA, the AFL-CIO Regional Labor Council, and General Motors.

The ad referred to negotiations between the local Blue Cross Blue Shield plans and Premier Health Partners. According to its web page, Premier Health Partners is an entity consisting of two general hospitals - Good Samaritan and Miami Valley– plus a primary care physician group, a home health agency, a Living Care Center, and a cancer prevention institute. The two general hospitals between them represent about three-fourths of the private general hospital beds in Dayton.

Apparently, negotiations have not been going very well. According to the ad, Premier is demanding a 45% increase in rates over a three year period – an amount that the ad sponsors clearly believe to be excessive. The ad also mentioned Premier’s $900 million in reserves and profitability at current rates. It said “….the very visible negotiations with Anthem Blue Cross and Blue Shield and Premier Health Partners should in no way be viewed as a tug-of-war between Anthem and Premier. This is an issue between Premier and those of us who live and work in this community…”

In his covering note, Tom pointed out that the ad “raises the important question as to what a not-for-profit hospital owes to the community with regard to cost control and profit expectations.”

He goes on to ask: “In particular, given the near monopoly position that some health systems have today (like Premier in Dayton), is it easier for them to push for revenue increases (despite the fact that quality and customer service may be deteriorating) rather than taking on the harder day-by-day struggle to cut costs and eliminate waste? And, for community-based health systems, given the near absent community voice in not-for-profit hospital system management, what level of profit is acceptable before the community needs to speak up and step in?”

Inasmuch as this, according to Tom, is not his area of expertise or responsibility at GM, he leaves the question with me.

I pass it on, in turn, to readers. I’m sure Tom would be as interested as I to hear what they have to say.

Monday, January 10, 2005

Still Further to Economies of Scale

The subject of economies of scale stimulated the below from Jeff Frommelt, long-time friend, colleague and head of the now defunct hospital consulting firm Herman Smith Associates.

Usually I post responses without comment, but I find it noteworthy in this case that they are focused on mergers. My posting tried to address what I saw as a basic misunderstanding of the concept itself, using hospital mergers as an example. Too abstract to be interesting, I guess.

Now to Jeff’s remarks:

I just love this discussion. However, comparing operational changes (economies of scale) in a static business, such as the production of burgers and fries, to a changing service delivery system, such as healthcare, is difficult.

During the merger mania of the 70's and 80's, we went back to several of the hospital organizations we had assisted in their merger to see if, after several years, the promises were obtained. We found that costs had risen faster than expected. However, the scope of services provided by the merged organizations had expanded considerably and market penetration had grown. The results were published.

These merged organizations were not located in the larger metropolitan areas and only had one or two local major competitors. Also, although clinical service scope increased, there was no indication that the quality of service to the community did or did not improve.

Don Arnwine's observations are the same I have seen. It is easy to fire human resource and purchasing people to save costs. Merging medical staff's and clinical departments are often CEO career shorteners.

Monday, January 03, 2005

Another Take on Economies of Scale

In response to my posting on the subject last November, the following came in from Don Arnwine, a long-time toiler in the vineyards of health care:

“I have had a different experience re ‘economies of scale’ and merger. Was once the first CEO of the merger of five hospitals. Based on my experience it is not the merger itself that failed to perform but the execution following the merger. Many don't face up to the conflict that bringing things together can create. That is particularly true of the medical staffs. I know of many merged situations in which the medical staffs are still separate 25 years later. No economies there.”

Sunday, January 02, 2005

Dispelling Myths About Malpractice

The November 29, 2004 issue of AHA News (the weekly newsletter of the American Hospital Association) carried an article entitled “Dispelling myths about our liability system” and authored by William R. Brody, M.D., President of Johns Hopkins University. The article had previously appeared in the Washington Post.

The five myths Dr. Brody undertook to dispel were:

- The medical malpractice crisis is someone else’s problem, not mine.
- We need to preserve the current legal system to guarantee a fair hearing and provide compensation for patients harmed by the health care system.
- The malpractice system is necessary to punish and remove incompetent health care providers.
- Malpractice costs are not a big deal – they amount to less than 2% of total health care costs.
- The current malpractice insurance system is in crisis because insurance companies are trying to cover losses from unwise financial investments made during the dot-com boom.

Readers of AHA News will judge for themselves how well Dr. Brody makes his case.

However, in presenting his arguments, Dr. Brody helps to perpetuate one of the most serious myths of all. As a sort of throw-away line in the discussion of his third myth, he says “Physicians, nurses, and other professionals want to provide quality care, but they are human and make mistakes.” The implication is that these things just happen and there is nothing to be done about it.

As is being shown with increasing frequency, that is simply not the case. When addressed as a system problem rather than one of fallible humans doing the best they can, the number of medical errors can be reduced markedly.

Dr. Brody would have made a valuable contribution if, instead of accepting the myth that medical errors are inevitable, he had included it as one to be dispelled.

Saturday, January 01, 2005

The End of Medicine as a Profession?

When in England I read The Daily Telegraph, a politically conservative paper and the largest by circulation in the country.

During my most recent visit, a major news item in the December 10, 2004 issue had to do with a report from Dame Janet Smith, a judge charged with investigating the activities of one Harold Shipman, a physician who is believed to have killed at least 215 patients with lethal injections of morphine.

That investigation led her to examine at some length the performance of the General Medical Council, the government body referred to as Britain’s medical watchdog. It seems that the GMC is controlled by physicians, some of whom are directly elected to membership by the profession itself.

While not holding it responsible for the crimes of Dr. Shipman (who hanged himself in his jail cell last January), Dame Smith said “Having examined the evidence, I have been driven to the conclusion that the GMC has not, in the past, succeeded in its primary purpose of protecting patients. Instead, it has, to a very significant degree, acted in the interests of doctors.”

Her report then went on to recommend a number of measures, the result of which would be to dilute the control that the medical profession has over the discipline of physicians and, ultimately, to remove that control altogether if the performance of the GMC does not improve.

A profession is understood to involve specialized knowledge and skills not possessed or comprehended by the laity. It follows that oversight of the performance of those within the profession should be the responsibility of the profession itself since no one outside the profession would be competent to do it.

Dame Smith threatens to take responsibility for the oversight of medical practice away from physicians. To a considerable extent, that has already happened in the U.S.

Does that mean that medicine no longer qualifies as a profession?

This page is powered by Blogger. Isn't yours?

FREE counter and Web statistics from sitetracker.com